1. I’m delighted to join the Deputy Prime Minister in extending a warm welcome to all Ministers, Government and Partner representatives.

In typical manner the Deputy Prime Minister has arranged for a splendid presentation and portrayal of what it is to be Samoan and to be in Samoa; and what he has said in his statement aptly sets the scene for the discussions over the next two days. Allow me then, in your name, to express to the Deputy Minister our warmest appreciation. In particular, and very sincerely, we thank the Government of Samoa for generously hosting this series of meetings. Despite last minute arrangements, we are all grateful for the accommodating and generous assistance which enabled these meetings to proceed.

2. We will have two busy days of proceedings where a range of important regional trade issues will be considered by PACP Trade Ministers. Your decisions could well influence the course of regional integration of the region. There are, I think, significant prospects for the deepening of regional integration, for such prospects are inherent in new trading arrangements that could emerge under PICTA, and PACER, and from the Economic Partnership Agreement (EPA) currently being negotiated with the European Commission, from the proposal for a Pacific Trade and Development Facility (PTDF), and the proposal for a Pacific Single Market and Economy.

3. Deepening regional integration will present opportunities that could overcome diseconomies of scale facing PACP States. All going well there will be feasible prospects, among others, for the pooling of resources and gradual removal of barriers to movement of goods and people. Through integration PACP States can benefit from a bigger collective economic space. This can be achieved by a variety of cooperative arrangements, with trade a significant pillar. In that context, the EPA, PICTA and PACER-Plus initiatives can be seen as opportunities on offer for the PACP States. The promise of markets and absence of barriers to trade offer incentives for investment, job creation and economic diversification. These are the essential fundamentals for economic growth and prosperity, key objectives of the Forum Leaders Pacific vision.

4. However, most PACP States are small economies and may not immediately be able to fully realise the benefits of their participation in regional trade arrangements. Obviously their needs will have to be addressed. Formulation of a mixture of national policies to defray the adjustment costs coupled with increased flows of Aid for Trade to develop productive infrastructure would be important, if not the key responses. Ministers will note that on this latter matter, there is a proposal submitted for your consideration to adopt a Pacific Aid for Trade Strategy. There is also a related proposal for the establishment of a Pacific Trade and Development Facility. These are important initiatives intended to ensure the PACP States are able to secure Aid for Trade resources to fund supply-side development needs.

5. I should mention that the WTO also provides for ways to address the vulnerabilities of small economies through rules on special and differential treatment, safe guard measures and coverage and extent of liberalization. To ensure regional trade arrangements are beneficial for the PACP States, there should be provisions assuring safe guards and long transition periods.

6. Time and again, I believe the PACP States have given clear demonstration that their positions are not unreasonable; indeed they reflect the fragile circumstances of their economies. These are circumstances that give context to the vulnerabilities of PACP States, as now for example, quite evident in the ensueing global economic crisis. Perhaps this is why the EC is now indicating flexibilities on some of the EPA issues which the PACP States have been insistent on. Perhaps the indication of flexibilities by the EC might be an opportunity to push along with the negotiations of the EPA which has stalled in the last nine months. Honourable Ministers might wish to consider providing clear directions on the way forward, noting that the EC seems to be conditioning the possibility of further negotiations on additional goods offers and the negotiation of services.

7. Meanwhile, the global economic environment has become less buoyant and there is a tendency toward inward orientation. The application of stimulus packages and lack of progress on the Doha negotiations pose concerns for the WTO rules on subsidies. It would seem trade might falter as Governments resort to protectionism. In these circumstances, PACP States are faced with very few options and must undertake reforms, in part to ensure resilience. Those Governments less reliant on duties would enjoy resilience as they have the ability to rely on stronger consumer demand to protect their growth. One of the implications for the PACP States is that reliance on duties may not necessarily be a good economic policy. In these circumstances too the availability of markets must be assured in order that PACP States could benefit from growth opportunities happening in other regions.

8. Lastly, an area for which the Pacific has natural comparative advantage but for which there is inadequate institutional capacity is traditional knowledge. There is significant potential in this area, and ongoing activities to ensure the proper institutional arrangements are established to protect Pacific traditional knowledge, must be supported. The Secretariat is working with partners such as WIPO to advance this work.

9. May I thank you all for your kind attention and wish Honourable Ministers every success in your deliberations.